Smith v. Bolles
Encyclopedia
Smith v. Bolles, , was an action to recover out-of-pocket damages for alleged fraudulent representations in the sale of shares of mining stock. The plaintiff was denied benefit of the bargain damages. The case is important in contract law, specifically legal remedies
and compensating expectancies.
disagreed, saying the measure of damages is not the difference between the contractprice and the fair market value if the property had been properly represented. The trial court should not have looked to what the plaintiff might have gained if the representations had been true, but rather what he had lost by being deceived into the purchase. Defendant is "bound to make good the loss sustained, such as the moneys the plaintiff had paid out and interest, and any other outlay legitimately attributable to defendant's fraudulent conduct; but this liability did not include the expected fruits of an unrealized speculation."
The judgment was reversed, with directions to grant a new trial.
Legal remedy
A legal remedy is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes some other court order to impose its will....
and compensating expectancies.
Facts
Plaintiff, Richard J. Bolles, agreed to buy from defendant Lewis W. Smith four thousand shares of the stock, at $1.50 per share. The contract was completed in March, 1880, by the payment of $6,000. Plaintiff then alleged that defendant's representations regarding the stock were false and fraudulent, and that in fact the stock was worthless. Plaintiff claimed furthermore that had the representations been true, the stock would now be worth $10 per share, and so plaintiff claimed that he had sustained damages of $40,000.Judgment
Chief Justice FullerMelville Fuller
Melville Weston Fuller was the eighth Chief Justice of the United States between 1888 and 1910.-Early life and education:...
disagreed, saying the measure of damages is not the difference between the contractprice and the fair market value if the property had been properly represented. The trial court should not have looked to what the plaintiff might have gained if the representations had been true, but rather what he had lost by being deceived into the purchase. Defendant is "bound to make good the loss sustained, such as the moneys the plaintiff had paid out and interest, and any other outlay legitimately attributable to defendant's fraudulent conduct; but this liability did not include the expected fruits of an unrealized speculation."
The judgment was reversed, with directions to grant a new trial.
See also
- Expectation damages
- List of United States Supreme Court cases, volume 132
- Erlanger v New Sombrero Phosphate CoErlanger v New Sombrero Phosphate CoErlanger v New Sombrero Phosphate Co 3 App Cas 1218 is a landmark English contract law, restitution and UK company law case. It concerned rescission for misrepresentation and how the impossibility of counter restitution may be a bar to rescission...
(1878) 3 App Cas 1218 - Derry v Peek